(Brussels) The 27 countries of the European Union announced Thursday that they had agreed to a loan of up to 35 billion euros (52 billion Canadian dollars) in favor of Ukraine, financed by exceptional profits released by Russian assets frozen in Europe.
The EU Council, the body representing member states, “has reached an agreement on financial assistance to Ukraine,” according to a press release.
This provides for a loan of an amount of up to 35 billion euros which will still have to be approved by the European Parliament before a final agreement by the Council. But, the 27 have chosen an accelerated procedure which should allow first payments from the beginning of 2025, according to the council.
More than €200 billion in Russian assets were frozen in the EU after Russia’s invasion of Ukraine in February 2022, around 90% of which are in Belgium, home of the international depository. Euroclear.
The Twenty-Seven reached an agreement in May to use the interest generated by these frozen assets of the Russian central bank. Some 1.5 billion euros have already been paid to Ukraine in July.
These assets are supposed to generate between 2.5 and 3 billion euros per year, in order to help arm Ukraine and finance its post-war reconstruction.
The G7 countries then agreed on a global loan of up to 50 billion dollars, or some 45 billion euros, in favor of Ukraine, financed by the interest produced by these frozen Russian assets.
The decision is, however, difficult to implement due to the guarantees requested by the United States. Washington wants to ensure that the freezing of Russian assets takes place over time to avoid any disruption in financing.
This freeze depends on a sanctions regime that the 27 must renew every six months. The Commission has therefore proposed that the renewal of the sanctions, relating to the freezing of the assets of the Russian central bank, should henceforth be carried out every three years. This decision, which requires unanimity of member states, is however blocked due to opposition from Hungary, a diplomatic source explained.
The United States, Canada, the United Kingdom and Japan have yet to decide how much they intend to participate in this 45 billion euro loan, decided within the framework of the G7.
The President of the European Commission Ursula von der Leyen, who announced from Kyiv on September 20 the granting of this loan by the EU, then said she was “absolutely confident” about their participation.
This is important because the EU will lower its contribution by 35 billion euros, if the total loan amount were to exceed 45 billion euros, taking into account the future commitments of other G7 countries.